Dulux Deal Collapses! Nippon Paint and Sherwin-Williams’ Joint Acquisition of AkzoNobel Abruptly Halted; AkzoNobel’s Share Price Plunges Over 20%

On April 16, the consortium submitted its initial acquisition proposal; On April 22, AkzoNobel’s Board of Directors swiftly rejected it; On April 29, the consortium submitted a non-binding cash offer of €73 per share, valuing the company at €12.5 billion. Looking back, this offer represented a ~39% premium over AkzoNobel’s closing price on May 26—the last trading day before the acquisition was terminated—demonstrating the consortium’s sincerity and determination. On May 1, AkzoNobel rejected the acquisition proposal once again. Under the proposed arrangement, Nippon Paint would have acquired AkzoNobel’s Decorative Paints and Industrial Coatings businesses—including the iconic brand Dulux—while Sherwin-Williams would have taken over the Automotive Coatings, Marine & Protective Coatings, and Powder Coatings divisions. The consortium emphasized that the proposal carried no financing contingencies and required no shareholder approvals from either party. However, after a comprehensive evaluation by AkzoNobel’s joint financial and legal teams, the €12.5 billion valuation was deemed insufficient to reflect the company’s long-term value. Moreover, the proposed business-split model entailed multiple uncertainties—including regulatory approvals and complex asset divestitures. Ultimately, after three rounds of engagement and two formal offers, the acquirers withdrew. III. Behind the Rejection of the Cash Offer: Why ‘Certainty’ Was Chosen Over ‘Premium’ Why did AkzoNobel reject the €73-per-share cash offer—twice? Price was not the sole consideration. AkzoNobel’s Board held that, although the cash offer was attractive, it failed to adequately reflect the company’s long-term value. As a century-old global coatings leader, AkzoNobel possesses exceptional brand equity and core technological barriers in decorative and industrial coatings. The Board viewed the Nippon Paint–Sherwin-Williams offer as underestimating AkzoNobel’s standalone growth prospects—and the synergies expected from its merger with Axalta. Certainty was equally critical. AkzoNobel’s merger agreement with Axalta had already been signed and revised multiple times. According to the latest update, the parties signed Amendment No. 1 to the Merger Agreement on May 2026, optimizing the merger structure. Shareholder voting is expected to commence in mid-July, with the transaction anticipated to close between late 2026 and early 2027—a clear, controllable, and countdown-underway path. In contrast, the Nippon Paint–Sherwin-Williams proposal remained non-binding, with numerous subsequent hurdles still to clear: due diligence, financing arrangements, antitrust reviews, and complex tripartite coordination—uncertainties far exceeding those associated with the existing merger plan. In choosing its strategic path, AkzoNobel opted for the one offering greater certainty. Integration and Growth—or Divestiture and Fragmentation? If AkzoNobel were to spin off its automotive and specialty coatings businesses to Sherwin-Williams, it would relinquish control over high-growth, high-barrier segments. Axalta, however, holds world-leading capabilities precisely in automotive coatings. Merging with Axalta is not fragmentation—it is a ‘strong-with-strong’ integration: the two companies’ portfolios are highly complementary, and their combination will yield a more complete and competitive enterprise. AkzoNobel chose integration and growth—not divestiture and fragmentation. IV. A Merger with Axalta Would Reshape the Global Coatings Industry Ranking

Two Proposals Rejected: Nippon Paint and Sherwin-Williams Terminate Their Plan to ‘Divide Up’ AkzoNobel

On June 3, Nippon Paint Holdings and Sherwin-Williams officially announced the termination of all preparatory work for their joint acquisition of AkzoNobel—bringing this €12.5 billion deal, which had captivated the global coatings industry, to an end. Following the announcement, AkzoNobel’s shares were temporarily halted at market open and plunged over 20% upon resumption—potentially marking its largest single-day decline in history. Earlier, both Nippon Paint and Sherwin-Williams had submitted two separate cash acquisition proposals, both of which were rejected by AkzoNobel’s Board. The company has consistently chosen to advance its merger plan with Axalta Coating Systems instead. In fiscal year 2025, Sherwin-Williams posted $23.574 billion in revenue, securing its position as the world’s top coatings company; AkzoNobel reported annual revenue of approximately $11.984 billion, ranking third globally, while Nippon Paint’s $11.844 billion placed it fourth. This revenue scale underscores the deal’s profound industry significance. Moreover, all three companies operate across core segments—including architectural coatings, industrial corrosion protection, and automotive coatings. Had the acquisition succeeded, it would have directly reshaped the global industry’s competitive landscape. Given strong business complementarity, Nippon Paint and Sherwin-Williams formed a consortium and formally launched acquisition talks with AkzoNobel in April. As previously reported, the acquisition negotiations unfolded across two formal proposals: the consortium submitted its first proposal on April 16, only to receive rejection on April 22; on April 29, it submitted a second non-binding cash offer of €73 per share, valuing the entire transaction at €12.5 billion. Upon public disclosure, the news briefly propelled AkzoNobel’s share price up nearly 20% in a single day. Under the proposed division of assets, Nippon Paint would have assumed AkzoNobel’s Decorative Paints and Industrial Coatings businesses—including the Dulux brand—while Sherwin-Williams would have acquired the Automotive Coatings, Marine & Protective Coatings, and Powder Coatings divisions—precisely filling gaps in each company’s respective portfolio.

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